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Medicare Reform: Issues Associated With General Revenue Financing

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Report Type Reports and Testimonies
Report Date March 27, 2000
Report No. T-AIMD-00-126
Subject
Summary:

Recent GAO testimony before Congress has raised concerns about the expanded use of general revenues to pay for the Medicare program and has urged comprehensive reforms to help ensure the program's long-term sustainability. (See GAO/T-HEHS/AIMD-00-77, Feb. 2000, GAO/T-HEHS/AIMD-00-103, Feb. 2000, and GAO/T-AIMD/HEHS-99-236, July 1999.) Leading Medicare reform proposals that include comprehensive reforms, such as those of the President and Breaux-Frist, would use general funds as part of their financing mechanisms. Although precedent exists for using general funds in federal trust funds, the challenge today is how to structure general fund infusions so they advance, rather than impede, needed reform and fiscal discipline. The testimony discusses the specifics of Medicare's financial health and issues raised by growing reliance on general revenue financing.

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